Proposed $30m Tender offer at 46p per share

Proposed Return of up to $30 million by way of Tender Offer at 46 pence per Ordinary Share

San Leon is proposing to purchase up to 50,475,000 Ordinary Shares through a tender offer at a price of 46 pence per Ordinary Share (the “Tender Offer”).

Highlights of the Tender Offer

The Tender Price represents a premium of 50% to the closing mid-market price on 19 February 2019 (being the latest practicable date prior to the release of this announcement); and

The maximum number of Ordinary Shares that may be acquired under the Tender Offer is 50,475,000, representing approximately 10% of San Leon's Issued Ordinary Share Capital on 19 February 2019 (being the latest practicable date prior to the release of this announcement).

Qualifying Shareholders will be entitled to have accepted in the Tender Offer valid tenders of their Basic Entitlement of approximately 10% of their shareholding and may also tender Ordinary Shares in excess of this amount.

The Tender Offer opens today and will close at 1.00 pm on 20 March 2019 with cash payments expected by no later than 29 March 2019.

Completion of the Tender Offer will be conditional on Shareholder approval of the Tender Offer at the Extraordinary General Meeting on 15 March 2019.

The preceding summary should be read in conjunction with the full text below, as well as the shareholder circular (the "Circular"), which the Company is posting to Shareholders today and which also includes notice of San Leon's Extraordinary General Meeting. A summary expected timetable of principal events is set out at the end of this announcement.

Oisin Fanning, CEO of San Leon, commented:“We are delighted to be able to announce this tender offer, which is considerably larger than previously announced. The scale of the Tender Offer reflects our strong financial position, our confidence in the Company’s future prospects and commensurate cashflow, and our view that the current share price does not reflect fully the potential value of our business. We will continue to seek opportunities to return capital to Shareholders through either further share buyback tenders or dividends, as the business continues to grow and we execute our strategy on the ground in Nigeria.”

San Leon Energy plc

Proposed Return of up to $30 million by way of Tender Offer at 46 pence per Ordinary Share Notice of Extraordinary General Meeting

San Leon is proposing to purchase up to 50,475,000 Ordinary Shares in the capital of the Company through a Tender Offer at a price of 46 pence per Ordinary Share.

The Company is today posting a circular to Shareholders outlining the Tender Offer and including a notice of Extraordinary General Meeting convened for 11.00 a.m. on 15 March 2019.

The Tender Offer is being made available to all Qualifying Shareholders who are on the Register at 6.00 p.m. on 20 March 2019. Qualifying Shareholders can decide whether they want to tender any, some or all of their Ordinary Shares in the Tender Offer. The maximum aggregate number of Ordinary Shares to be purchased under the Tender Offer is 50,475,000 Ordinary Shares, being approximately 10 per cent. of the current Issued Ordinary Share Capital of the Company. The Tender Price will be 46 pence per Ordinary Share which is a premium of 50 per cent. to the closing mid-market price on 19 February 2019, being the last practicable date to prior the release of this announcement.

The Tender Offer is being made by Cantor Fitzgerald Europe, as principal, on the basis that all Ordinary Shares that it buys under the Tender Offer will be purchased from it by the Company at the Tender Price. The Board is making no recommendation to Shareholders in relation to participation in the Tender Offer.

Shareholders are not obliged to tender any of their Ordinary Shares if they do not wish to do so. The Circular contains details on the procedure that should be followed by those Qualifying Shareholders wishing to participate in the Tender Offer.

Background to the Tender Offer

In September 2016, the Company secured an indirect economic interest in Oil Mining Lease 18 (“OML 18”), onshore Nigeria.

The Company undertook a number of steps to effect this purchase. Midwestern Leon Petroleum Limited ("MLPL"), a company incorporated in Mauritius of which San Leon Nigeria B.V. has a 40 per cent. shareholding, was established as a special purpose vehicle to complete the transaction by purchasing all of the shares in Martwestern Energy Limited (“Martwestern”), a company incorporated in Nigeria. Martwestern holds a 50 per cent. shareholding in Eroton Exploration and Production Company Limited (“Eroton”), a company incorporated in Nigeria and the operator of the OML 18, and it also holds an initial 98 per cent. economic interest in Eroton.

To partly fund the purchase of 100 per cent. of the shares of Martwestern, MLPL borrowed €156.6 million (US$174.5 million) in incremental amounts by issuing loan notes with a coupon of 17 per cent. (“Loan Notes”). Midwestern Oil and Gas Company Limited is the 60 per cent. shareholder of MLPL and transferred its shares in Martwestern to MLPL as part of the full transaction. Following its placing in September 2016, San Leon became beneficiary and holder of all Loan Notes issued by MLPL. San Leon is also a beneficiary of any dividends that will be paid by MLPL as a 40 per cent. shareholder in MLPL but the Loan Notes repayments take priority over any dividend payments made to the MLPL shareholders.

The economic effect of this structure is that San Leon has an initial indirect economic interest of 10.584 per cent. in OML 18. Shareholders will note this is higher than the percentage interest anticipated by San Leon at the time of the acquisition in 2016. There have been no further purchases or payments by San Leon but this revised percentage is based on a reassessment and recalculation of the various parties’ interests in OML 18 which has resulted in Martwestern’s economic interest in Eroton now standing at 98 per cent..

Quarterly payments to San Leon under the Loan Notes commenced during 2017 and have continued since. To date, San Leon has received aggregate payments under the Loan Notes totalling US$108.8 million. The payments received represent interest and principal on the Loan Notes. As such, the Company has a significant balance of cash. A further US$167.1 million of principal plus additional interest remains outstanding under the Loan Notes through to October 2020.

Although the Company’s recent share price performance has been positive, the Directors believe that the full potential of the Company (including the future Loan Notes repayments) is not reflected in the current share price. Consequently, the Company confirmed during 2018 that it intended to return not less than US$10 million to shareholders following completion of a court approved capital reduction which was required to enable the Company to return capital to its shareholders. Thiscapital reduction was finalised on 12 February 2019.

Further Loan Notes repayments have been received by San Leon since commencing the capital reduction process and, recognising that, the Directors have determined to increase the capital to be returned to US$30 million, being the maximum amount of the Tender Offer. In making this determination, the Directors have had regard to the Company’s existing cash balances, future financial commitments and the interests of Shareholders. In setting the Tender Price, the Directors have had regard to the placing carried out in September 2016, by reference to which the Tender Price is at a small premium.

Details of the Tender Offer

The Tender Offer is being made by Cantor Fitzgerald Europe to all Qualifying Shareholders. Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in Part III of the Circular and, in relation to Shareholders holding Ordinary Shares in a certificated form, on the Tender Form to be sent to Shareholders who hold their Ordinary Shares in certificated form.

The Tender Offer is open to Qualifying Shareholders on the Company’s Register as at 6.00 p.m. on the Record Date (20 March 2019).

Qualifying Shareholders are invited to tender any or all of their Ordinary Shares for purchase by the Company at the tender price of 46 pence per Ordinary Share (the “Tender Price”) and:

all Ordinary Shares under the Tender Offer will be purchased at the Tender Price;

the maximum number of Ordinary Shares that may be purchased is 50,475,000; and

tenders may be scaled back pro rata to the respective numbers of Ordinary Shares tendered if the number of Ordinary Shares tendered for purchase exceeds 50,475,000.

Subject to the satisfaction of the Company’s obligations under the relevant laws (which the Directors believe will be satisfied), and subject to the Resolution becoming effective, the purchase of Ordinary Shares by the Company under the Tender Offer will be funded from the Company’s existing cash resources. Ordinary Shares not validly tendered may not be purchased.

Ordinary Shares will be purchased from Qualifying Shareholders free of commissions and dealing charges.

Ordinary Shares validly tendered and purchased by the Company in accordance with the terms of the Tender Offer will be cancelled and will not rank for any dividends declared after, or whose record date is after, the date on which the Ordinary Shares are purchased by the Company (expected to be on 22 March 2019).

The costs (excluding stamp duty) relating to the Tender Offer, assuming the Tender Offer is fully subscribed, are expected to be approximately £185,000 excluding VAT.

The terms and conditions of the Tender Offer are set out in Part III of the Circular. Shareholders do not have to tender any Ordinary Shares if they do not wish to do so.

Any rights of Shareholders who choose not to tender their Ordinary Shares will be unaffected. However, the reduction in the Company’s issued share capital may result in a reduction in the liquidity of the Ordinary Shares in the secondary market.

Benefits of the Tender Offer to Shareholders

When originally announced, it had been the Directors’ intention to return capital to Shareholders through a share buyback. However, noting in particular the increased amount of the capital return, the benefits of the Tender Offer are that it:

(a) allows Qualifying Shareholders who may not be able to sell Ordinary Shares through a buyback in the market to participate;

(b) is available to all Qualifying Shareholders regardless of the size of their shareholding (subject to rounding);

(c) means tendering Qualifying Shareholders will receive a premium of 50 per cent. to the closing price of 30.6 pence per Ordinary Share on 19 February 2019 (being the Latest Practicable Date);

(d) provides Qualifying Shareholders who wish to sell Ordinary Shares the opportunity to do so on an equivalent basis to all Qualifying Shareholders;

(e) enables those Qualifying Shareholders who so wish to participate in the Tender Offer in excess of their otherwise pro rata entitlement, up to their maximum shareholding in the Company (subject to the maximum aggregate number of Ordinary Shares to be purchased under the Tender Offer of 50,475,000 Ordinary Shares), to the extent that other Shareholders do not wish to participate fully in the Tender Offer; and

(f) enables those Qualifying Shareholders who do not wish to realise their investment in Ordinary Shares at this time to maintain their current investment in San Leon.

Overseas Shareholders

Shareholders with registered or mailing addresses outside Ireland or the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than Ireland or the UK, should read paragraph 8 of Part III of the Circular and the relevant provisions of the Tender Form. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to complete and return a Tender Form.

Terms of the Tender Offer

The Tender Offer is conditional upon the following Tender Conditions:

(i) the Repurchase Agreement not having been terminated in accordance with its terms;

(ii) the Company being satisfied that it has available to it sufficient distributable profits (in accordance with section 117 of the Act) to effect the purchase of all tendered Ordinary Shares in accordance with the Repurchase Agreement;

(iii) Cantor Fitzgerald Europe being satisfied that the Company has procured payment of an amount equal to the Tender Price multiplied by the number of Ordinary Share successfully tendered into an interest bearing client bank account of the Receiving Agent in accordance with the Repurchase Agreement;

(iv) the Tender Offer not having been terminated in accordance with paragraph 7 of Part III of the Circular on or prior to 30 April 2019 (or such later time and date as the Company and Cantor Fitzgerald Europe may agree) prior to the fulfilment of the Tender Conditions referred to above;

(v) the aggregate consideration to be paid by Cantor Fitzgerald Europe in respect of the Tender Offer being no more than $30 million;

(vi) the total number of Ordinary Shares purchased pursuant to the Tender Price being not more than 50,475,000, representing approximately 10 per cent. of the Company’s issued share capital; and

(vii) the approval by the Shareholders of the Resolution at the Extraordinary General Meeting.

Company share options and management remuneration

As at the Latest Practicable Date, the Directors held options as further detailed in the Circular over a total of 13,590,000 Ordinary Shares. As at the Latest Practicable Date, other options and warrantshad been awarded over a total of 26,443,525 Ordinary Shares. The proportion of Issued Ordinary Share Capital that all awards or options represent as at the Latest Practicable Date is 7.91 per cent.. The proportion of Issued Ordinary Share Capital that all awards or option holders would represent if the maximum number of Ordinary Shares that may be purchased under the Tender Offer are acquired by San Leon and cancelled is 8.79 per cent., assuming no change to the number of options as described in the following paragraph.

In line with the Company’s commitment to staff incentivisation and retention, the remuneration committee of the Company (the “Remuneration Committee”) proposed to the Board that all existing Company share options which have an exercise price above 45 pence per Ordinary Share, are repriced with an exercise price of 45 pence, being a premium of 47 per cent to the closing mid-market price on the Latest Practicable Date and equivalent to the Tender Price. All other terms remain unchanged. In making this proposal, independent third party advice was obtained. The Board has accepted the proposal, and has implemented the repricing. The number of share options affected by these arrangements is 9,474,822 and the total number of all share options and warrants that are currently outstanding is 40,033,525.

New long term incentive arrangements

In addition to the above and following approval by the Remuneration Committee, the Company has put in place new long term incentive arrangements for the executive Directors of the Company. The long term incentive arrangements have been established in recognition of San Leon’s strategy to develop and grow its assets in Africa and it is intended that awards will first be made following any significant acquisition or investment that the Company may make. The long term incentive arrangements will be administered by the Remuneration Committee.

The Remuneration Committee has discretion to make awards under the long term incentive arrangements in the form of options over Ordinary Shares at an exercise price of 45 pence per share. The number of shares that may be granted under an award to any given participant in any financial year may not exceed such number of Ordinary Shares that has an award value equal to 3x the participant's salary.

At the time of making an award the Board will set challenging performance targets in order to align the interests of employees with shareholders and which must be satisfied before an award vests. Performance targets will be tested over a minimum three year period and will be structured:

(a) As to 50 per cent. of the award, an evaluation by the Remuneration Committee of the participant's personal contribution to the Company’s operations and performance; and(b) As to 50 per cent. of the award, based on the achievement of certain share price targets with a share price level of 75 pence being required for the maximum award to vest (with partial vesting on the attainment of prescribed share price thresholds in the range of 45 – 75 pence).

In addition to the above, and as previously announced, each of Linda Beal and Bill Higgs have been issued with share options over 1,000,000 Ordinary Shares at an exercise price of 45 pence. Both Linda and Bill received these share options as a result of their appointment as non-executive directors of the Company.